GBP/JPY watch: what are you watching this week?
A standing thread for the most volatile major cross. GBP/JPY combines cable's energy with the yen's sensitivity to rates and risk — the ranges are wide and the reversals are sudden.
Post:
- the levels you're tracking
- how you size positions on a pair this fast
- the BoJ and BoE signals that matter this week
Background: safe-haven currencies and the GBP/JPY page.
Background: Safe-haven currencies: why the yen and Swiss franc rise in a crisis
When markets panic, money flows into a few currencies seen as safe. Why the yen, franc and dollar play that role, and when it breaks down.
Why is the yen a safe-haven currency?
Japan holds large foreign assets that tend to be brought home in a crisis, and the yen is widely borrowed to fund carry trades. Both lead to yen buying when markets fall.
What is a risk-off move?
A shift away from risky assets such as stocks and higher-yielding currencies, towards perceived safe havens such as the yen, Swiss franc, dollar and gold.
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